NOTES ON THE FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES BASIS OF brPARATION OF ACCOUNTS The financial statements have been brpared on the basis of going concern, under the historic cost convention, except for certain tangible assets which are being carried at revalued amounts. These financial statements have been brpared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards specified under Section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014 and the other relevant provisions of the Act. The Ministry of Corporate Affairs has amended the Companies (Accounting Standard) Rules, 2006 (principal rules) vide notification no. G.S.R 364 (E) dated 30th March, 2016. However, the accounting standards notified under the said notification read with Rule 3(2) of the principal rules, shall be applicable to accounting periods commencing on or after 1st April, 2016 in respect of the Company. Accordingly, the Accounting Standards notified on 30th March, 2016 shall be applied with effect from 1st April, 2016. USE OF ESTIMATES The brparation of financial statements, require estimates and assumptions to be made that affect the reported amounts of assets and liabilities as on the date of the financial statements and reported amount of revenues and expenses during the reported period. The estimates made are based on the principles of prudence and reasonableness, however, actual results could differ from these estimates. Any revision to such accounting estimates is recognised prospectively in the current and future periods. FIXED ASSETS Tangible assets Tangible assets are stated at historical cost, net of accumulated debrciation and accumulated impairment loss, if any, except so far as they relate to the revaluation of land and buildings. Historical cost is inclusive of freight, installation cost, duties and taxes, interest on specific borrowings utilised for financing the assets and other incidental expenses. Debrciation is provided on straight line basis at the rates determined based on estimated useful life of assets. The useful life of the assets are periodically reviewed and re-determined based on a technical evaluation and expected use and the unamortised debrciable amount is charged over the remaining useful life of such assets. In certain cases, the useful life of assets so determined being different from the useful life as brscribed under Part C of Schedule II of the Companies Act, 2013, are given below: Buildings on Freehold Land - 20 years Buildings on Leasehold Land - 20 years Motor Vehicles - 4 years All assets costing less than Rs.5,000 are fully debrciated in the year of purchase. Debrciation on the revalued assets is calculated on the revalued costs and the Revaluation Reserve is adjusted with the difference between the debrciation calculated on such revalued costs and historic costs. Intangible assets Intangible assets are stated at cost net of accumulated amortisation and accumulated impairment loss, if any. Computer software (including license fees and cost of implementation/system integration services) is capitalised where it is expected to provide future enduring economic benefits. Cost of upgradation/enhancements is charged off as revenue expenditure unless they bring similar significant additional benefits. Intangible assets are amortised on a straight line basis over their estimated useful life. Useful life is determined based on the period of the underlying contract and the period of time the intangible asset is expected to be used i.e. Rights on time share- 20 years Computer software - 4 years Impairment of Assets All the fixed assets are assessed for any indication of impairment, at the end of each financial year. On such indication, the impairment loss, being the excess of carrying value over the recoverable value of the assets, is charged to the statement of profit and loss in the respective financial years. The impairment loss recognised in the prior years is reversed in cases where the recoverable value exceeds the carrying value, upon re-assessment in the subsequent years. INVENTORIES Inventories are valued at lower of cost and net realisable value. Cost is computed on weighted average method. Cost includes purchase cost net of CENVAT credit availed and attributable expenses. Consumption and/or other stock diminution is accounted for at the aforesaid weighted average cost. In the case of finished goods, cost comprises of material, direct labour, applicable overhead expenses, applicable excise duty and taxes paid/ payable thereon. Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and where necessary, provision is made for such inventories. Goods in transit/with third parties are valued at cost which rebrsents the costs incurred upto the stage at which the goods are in transit/with third parties. INVESTMENTS Long-term investments are valued at cost net of provision, for permanent diminution in value, if any. Current investments are stated at lower of cost and net realisable value. REVENUE RECOGNITION Sales are recognised when the property in the goods is transferred and are recorded net of trade discounts, rebates and value added tax. Gross Sales are inclusive of excise duty. Net Sales are stated after deducting such excise duty. Interest income is recognised on a time proportion basis taking into account the amount outstanding and rate of interest applicable. Dividend income from investments is recognised in the year in which the right to receive dividend is established. EMPLOYEE BENEFITS Contribution to various recognised provident funds, approved pension and gratuity funds and contributions to other retiral benefits are charged to revenue. Liabilities for retiral benefits which are in the nature of defined benefit schemes are determined on the basis of actuarial valuation as per the requirements of Accounting Standard 15 on "Employee Benefits" as at the end of the accounting period. Actuarial gains or losses arising during the year are recognised in the statement of profit and loss. Payments under Voluntary Retirement Scheme are charged to revenue on accrual basis in the year in which they become due for payment. LEASES Assets acquired by way of finance lease are capitalised at the lower of the fair value and the brsent value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are charged in the statement of profit and loss. Lease rentals paid in respect of operating leases are charged to the statement of profit and loss. TAXES ON INCOME Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods, subject to consideration of prudence. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. FOREIGN EXCHANGE TRANSACTIONS The transactions in foreign currency are accounted for at the exchange rate brvailing on the date of the transaction. Gains and losses resulting from the settlement of such transactions and from translation of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of profit and loss. The Company uses foreign exchange forward contracts and currency options to hedge risks associated with movements in foreign exchange rates. The use of these foreign exchange forward contracts and currency options is to reduce the risk or cost to the Company and are not meant for trading or speculation purposes. The Company adopted Accounting Standard 30 on "Financial Instruments: Recognition and Measurement" issued by the Institute of Chartered Accountants of India to the extent the adoption does not contradict with existing accounting standards and other authoritative pronouncements of the Company Law and other regulatory requirements. Foreign exchange forward contracts and currency options that are designated as cash flow hedges and qualify for hedge accounting are fair valued at each reporting date and the resultant gain or loss is recognised directly in Shareholders' Funds under 'Cash Flow Hedge Reserve Account' to the extent considered highly effective and are reclassified into the statement of profit & loss upon occurrence of the hedged transactions. Gain or loss on derivative instruments that are either not designated as cash flow hedges or designated as cash flow hedges to the extent considered ineffective is recognised in the statement of profit and loss. If the hedged transaction is no longer expected to occur, the net cumulative gain or loss on the hedging instrument recognised in Shareholders' Funds under Cash Flow Hedge Reserve is transferred to the statement of profit and loss. RESEARCH AND DEVELOPMENT Revenue expenditure on Research and Development is recognised in the statement of profit and loss in the year it is incurred. Capital expenditure on research and development is included under fixed assets. PROPOSED DIVIDEND Dividend (including related income tax thereon), proposed by the Directors, is provided for in the books of account, pending approval at the Annual General Meeting. 2. CONTINGENT LIABILITIES AND COMMITMENTS (a) Contingent Liabilities Claims against the Company not acknowledged as debts Rs.234.22 Lakhs (2015 - Rs.566.47 Lakhs). These comprise - (i) Tax demands disputed by the Company relating to disallowances/additions of fiscal benefits, pending before various judicial forums, aggregating to Rs.229.97 Lakhs (2015 - Rs.562.22 Lakhs). (ii) Other matters relating to labour cases, etc. aggregating to Rs.4.25 Lakhs (2015 - Rs.4.25 Lakhs). (b) Commitments Estimated amount of contracts remaining to be executed on Capital Account (not provided for) - Rs.3248.41 Lakhs (2015 - Nil). 3. FUTURE LEASE OBLIGATIONS The Company has entered into various operating lease agreements and the amounts paid under such agreements have been charged to revenue as Rent under Note 25. All these agreements are cancellable in nature. 4. 41. COMPARATIVE FIGURES The Comparative figures for the brvious year have been re-arranged to conform with the current year brsentation of the accounts. For LOVELOCK & LEWES Firm Registration No. 301056E Chartered Accountants N.K. VARADARAJAN Partner Membership No. 90196 On behalf of the Board, R. S. NORONHA Chairman DIN: 00012620 N. SAI SANKAR Managing Director DIN: 00010270 ANISH GUPTA Chief Financial Officer NITESH BAKSHI Company Secretary Hyderabad, 20th April, 2016. |
